DOJ: Major U.S. customs fraud uncovered

July 25, 2012 at 8:21 PM
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SAN DIEGO, July 25 (UPI) -- Eight people and three firms illegally imported at least $100 million worth of foreign goods into California, U.S. officials charged Wednesday.

U.S. Attorney for the Southern District of California Laura E. Duffy said in a release the defendants are accused of evading millions of dollars in import taxes when they brought Chinese-made apparel, Indian-produced cigarettes and other goods into the country through the Long Beach Port-of-Entry.

The defendants, including San Diego Customs Brokers Association President Gerardo Chavez, allegedly generated paperwork and database entries indicating the goods were not intended to be sold in the United States, but instead were simply en route to another country, such as Mexico.

"The charges announced today underscores our commitment to ensure that no one exploits the import process for personal gain," Duffy said. "Not only does such illegal conduct present a significant danger to the American people, but it deprives law abiding companies of a level playing field resulting in the potential loss of billions of dollars in revenue."

U.S. Immigration and Customs Enforcement Director John Morton said the investigation "pulled back the curtain on a potentially costly fraud scheme operating in one of the world's busiest commercial centers."

The federal authorities allege that instead of shipping the goods to other countries, the defendants would hire truck drivers to haul them to warehouses throughout Southern California. False paperwork and database entries would be created before the products were returned to Los Angeles and other destinations for shipment throughout the United States, authorities allege.

The Justice Department said 90 illegal shipments worth at least $100 million had been identified. More than $10 million in customs duties, taxes and other revenue were lost as a result.

Besides Chavez and his companies -- Tecate Logistics LLC and International Trade Consultants LLC -- the defendants include Sunil Mirwani, a British citizen, and his company, M Trade Inc. The remaining defendants are employees and agents of customs brokers, wholesalers and transport companies alleged to have knowingly aided the conspiracy.

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